China’s Xiaomi makes strides in smartphone race

China's low-cost smartphone maker Xiaomi is making great strides in the global smartphone race with two of its models ranking in a list of the world's top 10 bestselling smartphones for the first time.

Xiaomi's Hongmi Redrice and Mi3 smartphones were the 7th and 10th top selling models globally in February, according to a new report from Counterpoint Technology Market Research.

Apple's iPhone 5s remained the bestselling phone in the world – a position it has held for six straight months. The iPhone 5c, meanwhile, came in at second place, mostly due to the big clearance discounts in Western markets, Counterpoint said. Rival Samsung's Galaxy S4 and Galaxy Note 3 tied for 3rd place.

"At the global level there has been little brand diversity over recent months. However the appearance of Xiaomi on the best sellers list highlights an increasing trend – local brands moving up the sales rankings in their respective countries," said Peter Richardson, research director at Counterpoint.

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Lei Jun, CEO of Xiaomi

"It's a consequence of commoditization of hardware and software. Provided the price is sufficiently attractive, consumers are willing to try local brands over the higher profile global brands," he said.

Xiaomi handsets are mainly sold in China, where the company is getting a cult-like following through its affordable yet sleek offerings.

It recently started shipping to neighboring countries including Singapore, selling 5,000 smartphones within eight minutes of going on sale earlier this year.

Xiaomi's low-price strategy has been a key driver of its success in the fiercely competitive Chinese market. Xiaomi's Andriod-powered 5-inch Mi3 sells for around $330, much lower than the $720 price tag for the least expensive Apple iPhone 5C model.

"This shows you don't have always to be big to win the game, the smart and fast wins in the mobile market. It always has been and always will be," Counterpoint said.

Xiaomi, which sold 11 million phones in the first quarter of the year, recently upped its annual sales projection to 60 million from a previously predicted 40 million. It plans to sell 100 million in 2015.

Counterpoint expects a further shake up in the best seller's list in March and April, as Samsung's new Galaxy S5 becomes available and the iPhone 5c discounts have ceased.